How to Save Yourself From Tax Hell

3 replies
This is my first year running an Australian company. I always feared the taxation side of business and complying with the Government, which delayed me starting a company.

It's tax time for us Aussies so this is the first time I will be doing the annual reporting required by the Government... and boy, my fears have become reality!

Due to one simple, stupid mistake I made, it is hell sorting my bookkeeping out. I accepted payments for my programs, affiliate commissions, and donations via PayPal, but I also had my personal expenses from eBay tied into that account.

Business owners are required to setup a separate bank account for business, but PayPal? I didn't bother. This has made it hell reconciling expenses. Accepting US currency and buying things in AU dollars makes it even worse. Auditors hate this stuff.

Trust me, you don't want to put yourself into such a mess. Recently I discovered you can have two PayPal accounts, one for personal means and another for business (I never even thought about it before!) Make sure you do it that way...
#hell #save #tax
  • Profile picture of the author Pete223
    So many small businesses are wiped out every year from poor accounting
    practices that can haunt you for a very long time!

    Very good advice to do this right from the get go! If ever the government
    comes knocking on your door, believe me, you want to be prepared... it can
    be a very unpleasant situation if you are not, because they are always
    right, unless you can prove them wrong! (definitely not the other way around!)

    Cheers, Pete
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  • Profile picture of the author endeavour
    Thanks for the information... Just starting my business now...this will prove invaluable. .....Lester
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  • Profile picture of the author tessmac9708
    We went through this a couple of years ago. We got caught up in someone else's investigation and spent 18 months, and nearly $20K in accountants fees before the being found "Not Guilty"

    Tax authorities around the world are waking up to the fact that a lot of revenues made online are not being declared. In the current economic climate, this is even truer now, as all governments are looking to increase revenues.

    With the likes of Ebay, many people begin selling as a hobby, and then progress to a fully fledged online business. I'm also guessing that there are thousands who dont submit thier earnings as fully as they should do.

    My advice would be to always get a good accountant. your fees will increase as and when your business grows, but in the long run, it will save you a lot of time, trouble and money.

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